The values at the heart of the Tata Group as well as the role played in its development by the philanthropic trusts that own two-thirds of the company are explored in a new book that is a brief history of the Tatas.
These are among several aspects that the book “The Greatest Company in the World?: The Story of Tata” by Peter Casey looks into.
It charts the contribution of every Tata chairman – from Jamsetji Tata, who set up the company in 1868, to Ratan Tata and Cyrus Mistry in transforming the company into one of the most professionally-managed enterprises in the world.
As founder and Executive Chairman of Claddagh Resources, Casey decided to write the book initially to help his recruiters and executive search consultants have a better understanding of Tata Consultancy Services (TCS), which over 14 years, had become his company?s biggest client.
“It was supposed to just be a short 15-page summary, but the more I started studying TCS and Tata, the more captivated I got and the project developed a life of its own,” he says.
According to the writer, while other successful capitalists and captains of industry started companies to create profit and, thereby, wealth, Jamsetji Tata planted the seeds of philanthropic trusts, which now own 66 per cent of the Tata Group.
“In harmony with his religion, Tata’s company would exist to finance and initiate projects to improve the lives of the people of India,” he says.
“So, Jamsetji Tata became not only a catalyst for sweeping change in his vast homeland, but, in the process, conceptualised an entirely new way of doing business as well as philanthropy. What he began has changed the lives of billions, as the company he founded continues to work for the betterment of society,” he says.
In the words of Jamsetji, “We think we started on sound and straightforward business principles, considering the interests of the shareholders our own, and the health and welfare of the employees, the sure foundation of our success.”
Today, the Tata Group employs nearly half a million people, and earns revenues of $ 100 billion. It reported a profit of $ 6.23 billion in 2011-12, and controls assets valued at $ 77.7 billion.
“The philanthropic trusts control a majority of the Tata holding company, Tata Sons. The Tata family is a very small shareholder. Yet, the owners are only one of four stakeholders Tata sets out to serve. In addition to the owners (which include shareholders) are employees, customers, and society itself,” the book, published by Penguin, says.
“The guiding principle for everyone at Tata is sharing the wealth. With Tata reporting annual profits in 2012 of $ 6.23 billion, this means that a very large amount of money is invested back into the economy every year just from this one source,” it says.
The members of the Tata family have established a set of philanthropic trusts to which the majority of the family’s personal wealth has been dedicated and bequeathed.
Like their father, Dorabji Tata and Ratan Tata also donated the majority of their personal wealth to trusts they established.
The book also talks about Jamsetji Tata’s successor Dorabji Tata’s passion for sports and how he advocated India’s participation in the Olympics as early as 1919, much before the nation had established its own Olympic committee.